FKI Opposes to Strengthen FTC`s Investigative Power

The Federation of Korean Industries (FKI) criticized the Fair Trade Commission (FTC)`s pursuit of systematization of investigating right on the companies` illegal inter-unit transactions, saying, “it may abuse the power. ”

FKI said as above in the report titled ` the issues and suggestions on FTC`s official right to investigate` on the 14th, and insisted, “it is desirable to improve the system to enhance management transparency instead of enforcing the power to investigate. ”

The report pointed out that FTC has almost as great power as the National Tax Service (NTS)`s such as the right of on-site investigation, demanding presentation of data, keeping the submitted data, and tracing financial transactions, and it has not less powers than foreign competition authorities have, as it has a right of accusation, though it doesn`t have the right of seizure and investigation

Especially advanced countries don`t regulate the illegal inter-unit transactions with competition law, which may shrink the business and produce many criminals, criticized the report.

FKI pointed out that Applying forceful investigative power, which is used to investigate criminal cases, to insider transactions does not correspond to legal principles, reminding that Seoul High Court asked the constitutional court to examine the unconstitutionality of FTC`s punishment on the illegal insider trading in September last year.

The report insisted that the enforcement of investigative power might cause the abuse of the power due to the arbitrariness of the conditions of investigation, while those of America are strict that preliminary investigation on legal trading should be preceded by the approval of Justice Minister or Federal Trading Committee.

FKI stressed that if present regulations should be maintained until management transparency is secured, the regulations should be limited to monetary punishment such as fining, and reduce the burden of companies caused by duplicated investigations through improving investigating skill like constant monitoring.

Yeon-Su Sin ysshin@donga.com